The One Big Beautiful Bill Act that narrowly passed the U.S. House of Representatives on May 22 includes provisions that could jeopardize billions of dollars in Virginia green energy projects.
Charlottesville-headquartered Southern Environmental Law Center reports federal agencies have put more than $5 billion into 350 clean energy projects in the commonwealth since the passage of the Inflation Reduction Act in 2022. The private sector has also made significant investments in clean energy efforts, with $2.3 billion supporting 99,614 jobs in Virginia.
That investment was bolstered, at least in part, by clean energy tax credits that are now on the chopping block in the sweeping plan that has moved to the U.S. Senate. Notable credits terminated or phased out by the House version of the bill include the advanced manufacturing production credit, clean fuel production credit, and clean electricity production and investment credits.
Each credit significantly cuts costs for investors in clean energy, with the advanced manufacturing production credit applicable to components used for solar energy, wind energy, inverters, electrode active materials, specific battery components, and some critical minerals. The clean fuel production credit, which went into effect at the beginning of 2025, incentivizes the domestic production of sustainable aviation fuel and other fuels as determined by emissions factors.
“The effective repeal of these clean energy tax credits will hamstring clean energy progress, innovation, and job growth that we’re seeing in the South,” said SELC Senior Legislative Associate Bonnie Angermeier at a May 20 media briefing. “Energy developers, municipalities, and communities have been depending on these credits to move their projects forward, and the effective repeal of the credits will create business uncertainty and halt that clean energy progress.”
If passed as-is, the bill could have long-term impacts on Virginia’s economy and drive up costs for consumers, according to Angermeier.
“From a business standpoint, the bill creates severe uncertainty in clean energy markets, increases costs for utility-scale solar and wind projects, and makes projects unworkable,” she says, adding that the bill “will halt forward-looking progress in Virginia in its tracks. If this bill becomes law, Charlottesville-area residents will likely see increases to their utility bills, and job losses in their communities when projects are shuttered.”
The nonprofit is tracking potential impacts to projects across the commonwealth, including the Coastal Virginia Offshore Wind project from Dominion Energy, Charlottesville’s primary energy provider.
Upon its anticipated completion in 2026, the project is slated to be “the largest commercial offshore wind project and able to power over 600,000 homes.” However, funding for expansions and related projects has come into question.
Numerous smaller organizations would also be affected by the elimination of the clean energy tax credits. “Schools, churches, nonprofits, municipalities, libraries, and others will lose access to affordable, reliable clean energy options,” says Angermeier. “For instance, the historic Wesley Union [African Methodist Episcopal] Zion Church plans to continue using the tax credits to add energy storage, but this will be made extremely difficult, if not impossible, by this bill.”
The Charlottesville First United Methodist Church filed for a refund through the same program earlier this spring, according to the Virginia Independent. Solar panels were installed on top of the church in August 2024.
While the current version of the legislation is expected to be dead on arrival in the U.S. Senate, it is unclear if language slashing clean energy investments and tax credits will make it into the final version of the bill. In addition to the Democratic caucus, several Republican senators have raised issues with the OBBBA, which include the full-scale elimination of clean energy tax credits.
To pass the Senate, the legislation will need support from at least 50 of 53 Republican senators if all Democratically aligned members vote against the bill.
In an April 9 letter to Senate Majority Leader John Thune, Republican Sens. Lisa Murkowski, John Curtis, Thom Tillis, and Jerry Moran all expressed support for energy tax credits. In addition to the four Republican senators in favor of keeping the tax credits, others have voiced concern about changes to Medicaid, food stamps, and the debt ceiling.
“Even though the bill passed the House, it’s not too late for Virginians to weigh in. As this moves to the Senate, they should be very concerned about how this bill will affect energy bills and hurt the local economy and jobs,” says Angermeier. “Local voices can still make a difference and ask their senators to stand up for these critical investments in clean energy.”
Virginia Sens. Tim Kaine and Mark Warner publicly criticized Republican efforts to rollback clean energy investments from the Inflation Reduction Act in a May 20 statement, voicing concern about the long-term effect on Virginia’s economy. “Rolling back these investments would not only endanger these jobs but also hinder our progress toward a more sustainable and affordable energy future,” said Kaine and Warner. “We must protect the investments that are creating jobs and lowering costs for Virginians. The Republican plan puts our economic future at risk.”
The Senate debate over the legislation was ongoing at press time.
The One Big Beautiful Bill Act that was passed last month by the U.S. House of Representatives includes the elimination of clean energy tax credits. File photo.
